Congress has identified three primary objectives for monetary policy in the Federal Reserve Act: to maximize employment, to maintain stable prices, and to moderate long-term interest rates. The first two objectives are sometimes referred to as the Federal Reserve's 'dual mandate.' The responsibilities of the Federal Reserve have grown over the years and currently include supervising and regulating banks, maintaining the stability of the financial system, and providing financial services to depository institutions and the U.S. government, as well as foreign official institutions. The Federal Reserve also conducts economic research and publishes numerous reports, such as the Beige Book and the Federal Reserve Economic Database.
The Federal Reserve System consists of several layers. It is governed by a presidentially appointed Board of Governors or Federal Reserve Board (FRB). Privately-owned commercial banks are supervised by twelve regional Federal Reserve Banks spread throughout the country. Nationally chartered commercial banks are required to hold stock in their local Federal Reserve Bank and may elect some members of the Federal Reserve Bank's board in their areas.
Decisions related to money are made by the Federal Open Market Committee (FOMC). There are twelve regional presidents of the Federal Reserve Bank, along with all seven members of the Board of Governors, but only five of them can vote at any one time: the President of the Federal Reserve Bank of New York and four other presidents who rotate voting periods for one-year terms. There are also various advisory boards that have a structure distinguishing them from other central banks; they are unique in that the U.S. Department of the Treasury, which is a separate entity from the central bank, is responsible for printing money.
The federal government sets the salaries of the seven board governors and receives all annual profits of the system after paying dividends on capital stock investments for member banks and retaining a surplus in the account. In 2015, the Federal Reserve reported a net profit of $100.2 billion and transferred $97.7 billion to the U.S. Treasury. In 2020, it achieved profits of $88.6 billion and transferred $86.9 billion to the Treasury.
Although the Federal Reserve System is considered a tool of the U.S. government, it views itself as an 'independent central bank' because its monetary policy decisions do not have to be approved by the U.S. president or anyone else in the executive or legislative branches of government. The Federal Reserve System does not receive funding from Congress, and the terms of board members can extend across several presidential administrations. Jerome Powell currently chairs the Federal Reserve, succeeding Janet Yellen. Alan Greenspan is one of its most well-known chairs of the century.